In May, 2013, The U.S. Supreme Court issued a unanimous ruling in favor of the petitioner in Bullock v. BankChampaign, N.A., a pro bono bankruptcy case argued on behalf of the petitioner by Sutherland partner Thomas M. Byrne. The case was brought before the court in association with the Emory Law School Supreme Court Advocacy Project (ELSSCAP), a student-run supreme court litigation group. The high court granted review in Bullock to resolve a circuit split regarding the interpretation of the term "defalcation" in the bankruptcy code. In the 9-0 opinion authored by Justice Breyer, the court held that to prove defalcation a creditor must demonstrate that the debtor acted with a culpable state of mind involving knowledge of, or gross recklessness with respect to, the improper nature of the fiduciary behavior. The court rejected arguments made by the respondent bank that succeeded Mr. Bullock as trustee and by the U.S. Solicitor General.
The decision in the case offers the debtor a chance on remand to have his day in court, and potentially discharge the disputed debt.